Consumer Spending, Personal Income Rise
biz.yahoo.com
Tuesday May 28, 9:02 am Eastern Time
Reuters Business Report
Consumer Spending, Personal Income Rise
WASHINGTON (Reuters) - U.S. consumers spent solidly in April and personal income rose for the fifth straight month, the government said on Tuesday in a report showing shoppers are helping to underpin the economic recovery.
Consumer spending, also up for the fifth month in a row, rose 0.5 percent to $7.32 trillion in April after gaining 0.3 percent the previous month, the Commerce Department said. The number was slightly lower than analyst expectations of a 0.7 percent increase.
Spending on durable goods -- items designed to last three years or more, like cars or washing machines -- jumped 1.4 percent after a decline of 0.2 percent in March.
Personal income grew 0.3 percent in April, matching analyst expectations, compared to a 0.4 percent increase the previous month.
The rise in consumer spending, which accounts for two-thirds of economic activity, was good news for the economy as it gets back on its feet after the recession that began in March last year.
The number also shows a good start for spending in the second quarter. In the first three months of the year, U.S. gross domestic product was up 5.6 percent and consumer spending posted a respectable 3.2 percent rise.
With the rise in consumer spending outpacing growth in income in April, the savings rate fell to 2.8 percent from 3.0 percent in March.
The report showed inflation, key to the thinking of Federal Reserve policymakers as they try to decide when to increase U.S. interest rates, edging up slightly.
The PCE price index, closely watched by Fed Chairman Alan Greenspan, rose 0.4 percent, the largest rise since 0.6 percent in October last year. The so-called core rate, which strips out volatile food and energy prices, rose 0.2 percent. |
